Month: July 2015

This past May, Governor Sandoval signed off on legislation that allows ride-sharing services like Uber, Lyft and others to officially operate in Nevada. The same demand that propelled many major U.S. cities was driving the push for ride-sharing in Las Vegas and Reno. These services are, without a doubt, convenient and often cheaper alternative to regular taxi services. And now, researchers are reporting a significant drop in the rate of vehicle-related homicides after the introduction of a ride-sharing economy.

A report from authors Brad Greenwood and Sunil Wattal at Temple University, “Show Me The Way To Go Home: An Empirical Investigation of Ride Sharing and Alcohol Related Motor Vehicle Homicide“, focuses on a social benefit consistently associated with these platforms, and presently being debated in the media – the potential for reducing the instances of drunk driving. “Existing regulatory structures for traditional vehicle hire services like taxicabs are designed to retard the number of licensed vehicles on the road; however, the absence of a sufficient number of taxis may result in citizens operating motor vehicles under the influence of alcohol.” The report goes into the economic burden on taxpayers, such as the cost of prosecuting and incarcerating individuals convicted of DUI, the effective management of the number of and type of vehicle for hire services, posing a significant challenge for policy makers.

While significant debate has surrounded the entry of ride-sharing in a local economy in terms of circumnavigating the bureaucratic processes of licensed livery, upsetting the balance of service providers, financial incentives and other hot topics, little empirical research has been done on the social benefits (or lack thereof) of these platforms, until now. A simple econometric study conducted by ride-sharing giant UBER provided evidence that their network of safe, readily-available rides had a meaningful and measurable impact on drunk driving in cities in which Uber operates freely. The Temple University research indicates that the entrance of Uber X results in a 3.6% – 5.6% decrease in the rate of motor vehicle homicides per quarter in the state of California. “With more than 13k deaths 22 occurring nationally each year due to alcohol-related car crashes at a cost of $37 billion dollars, results indicate that a complete implementation of Uber would create a public welfare net of over 1.3 billion to American taxpayers and save roughly 500 lives annually,” the report concluded. Moreover, with costs to the individual (e.g. court costs, insurance rate increases, loss of income) totaling between 5k and 12k dollars for the first DUI offense, significant welfare accrues to the individual as well by leveraging ride-sharing services.